SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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NORTH COUNTRY FINANCIAL CORPORATION
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NORTH COUNTRY FINANCIAL CORPORATION
3530 North Country Drive
Traverse City, Michigan 49684
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 17, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of North Country Financial Corporation (the "Corporation"), a Michigan corporation, will be held on April 17, 2001, at 6:00 p.m. at the Grand Traverse Resort and Spa, 100 Grand Traverse Village Boulevard, Acme, Michigan 49610, for the following purposes:
1. To elect two (2) directors, each to hold office for a three-year term.
2. To transact such other business as may properly come before the meeting or any adjournment thereof.
The board of directors has fixed March 1, 2001, as the record date for the determination of shareholders entitled to notice of and to vote at the meeting or any adjournment thereof.
By order of the Board of Directors
Ronald G. Ford
Chairman and Chief Executive Officer
Your vote is important. Even if you plan to attend the meeting, please date and sign the enclosed proxy form, indicate your choice with respect to the matters to be voted upon, and return it promptly in the enclosed envelope. Note that if the stock is held in more than one name, all parties must sign the proxy form.
Dated: March 12, 2001
NORTH COUNTRY FINANCIAL CORPORATION
3530 North Country Drive
Traverse City, Michigan 49684
PROXY STATEMENT
This proxy statement and the enclosed proxy are furnished in connection with the solicitation of proxies by the board of directors of North Country Financial Corporation (the "Corporation"), a Michigan corporation, to be voted at the annual meeting of shareholders of the Corporation to be held on Tuesday, April 17, 2001, at 6:00 p.m., at the Grand Traverse Resort and Spa, 100 Grand Traverse Village Boulevard, Acme, Michigan 49610, or at any adjournment or adjournments thereof, for the purposes set forth in the accompanying notice and in this proxy statement.
This proxy statement has been mailed on or about March 12, 2001, to all holders of record of common stock of the Corporation as of the record date. The board of directors of the Corporation has fixed the close of business on March 1, 2001, as the record date for the determination of shareholders entitled to notice of and to vote at the meeting and any adjournment thereof. As of March 1, 2001, 7,017,931 shares of common stock were outstanding. Each outstanding share will entitle the holder thereof to one vote on each separate matter presented for vote at the meeting.
If a proxy in the enclosed form is properly executed and returned to the Corporation, the shares represented by the proxy will be voted at the meeting and any adjournment thereof. If a shareholder specifies a choice, the proxy will be voted as specified. If no choice is specified, the shares represented by the proxy will be voted for the election of all of the nominees named in the proxy statement and in accordance with the judgment of the persons named as proxies with respect to any other matter which may come before the meeting. A proxy may be revoked before exercise by notifying the Chairman of the Board in writing or in open meeting, by submitting a proxy of a later date or attending the meeting and voting in person. All shareholders are encouraged to date and sign the enclosed proxy form, indicate your choice with respect to the matters to be voted upon, and return it to the Corporation.
Votes cast at the meeting and submitted by proxy are counted by the inspectors of the meeting, who are appointed by the Corporation. A plurality of the votes cast at the meeting is required to elect the nominees as directors of the Corporation. As such, the two individuals who receive the largest number of votes cast at the meeting will be elected as directors. Shares not voted at the meeting, whether by broker nonvote, or otherwise, will not be treated as votes cast at the meeting and will have no effect on the outcome of the voting. An abstention will be treated as a vote cast. An abstention will have no effect on the voting for directors.
ELECTION OF DIRECTORS
The bylaws of the Corporation provide for a board of directors consisting of a minimum of five (5) and a maximum of fifteen (15) members. The restated articles of incorporation of the Corporation and the bylaws also provide for the division of the board of directors into three (3) classes of nearly equal size with staggered three-year terms of office. Two persons have been nominated for election to the board, each to serve a three-year term expiring at the 2004 annual meeting of shareholders.
Unless otherwise directed by a shareholder's proxy, the persons named as proxy holders in the accompanying proxy will vote for the nominees named below. In the event any of such nominees shall become unavailable, which is not anticipated, the board of directors at its discretion may reduce the number of directors or designate substitute nominees, in which event the enclosed proxy will be voted for such substitute nominees. Proxies cannot be voted for a greater number of persons than the number of nominees named.
The board of directors recommends a vote FOR the election of all the persons nominated by the board.
The following information has been furnished to the Corporation by the respective directors and director nominees. Each of those persons has been engaged in the occupations stated below for more than five years.
| Director of | |
Nominees for Election as Directors for Terms Expiring in 2004 | ||
Stanley J. Gerou II | 52 | 1989 |
John D. Lindroth | 45 | 1987 |
Directors Whose Terms Expire in 2003 | ||
Paul W. Arsenault | 44 | 1999 |
Bernard A. Bouschor | 52 | 1996 |
Wesley W. Hoffman | 45 | 1999 |
Directors Whose Terms Expire in 2002 | ||
Ronald G. Ford | 53 | 1987 |
Michael C. Henricksen | 58 | 1988 |
John P. Miller | 62 | 1976 |
The board of directors has an audit committee comprised of John Lindroth (chairman), Paul Arsenault, and John Miller. Six meetings of the committee were held during 2000. The committee's primary function is to assist the board in fulfilling its oversight responsibilities by reviewing the financial information that will be provided to shareholders and others, the systems of internal controls that management and the board have established and the audit process. The primary responsibilities of the audit committee are to:
The compensation committee is comprised of Wesley Hoffman (chairman), Stanley Gerou, and Michael Henricksen. Six meetings of this committee were held in 2000. This committee is responsible for recommending annually to the board the salary of the Chairman and CEO. This committee additionally reviews with management the annual projected salary ranges and recommends those for board approval. This committee reviews the written personnel policy and the employee benefit package annually.
The nominating committee of the board, comprised of Mike Henricksen (chairman), Bernard Bouschor, Stanley Gerou, and John Lindroth, is responsible for recommending to the board nominees to stand for election as directors and to fill any vacancies which may occur from time to time. In addition, the nominating committee is responsible for considering any nominations for director submitted by shareholders. The nominating committee held two meetings in 2000.
Shareholder proposed nominations must be made in accordance with the Corporation's Articles of Incorporation. The Articles of Incorporation provide, among other things, that shareholder proposed nominations must be accompanied by certain information concerning the nominee and the shareholder submitting the nomination and must be received by the Corporation no later than sixty (60) nor more than ninety (90) days prior to the first anniversary of the preceding year's annual meeting.
The board also has an executive committee comprised of Ronald Ford (chairman), Stanley Gerou, Michael Henricksen, John Lindroth, and John Miller. This committee handles strategic planning for the Corporation and its subsidiaries.
The board of directors held a total of six meetings during 2000. No director attended less than 75 percent of the aggregate number of meetings of the board and the committees on which he served, other than Mr. Bouschor. There are no family relationships between or among any of the directors, nominees, or executive officers of the Corporation.
Remuneration of Directors
The directors of the Corporation each receive a fee of $500 for attendance at meetings of the board, except for the Chairman who receives $1,000 per meeting. The directors of the Corporation also serve on the board of directors of North Country Bank and Trust ("Bank"), for which they are paid an annual fee of $1,200 and a fee of $1,000 per meeting (except for Ronald Ford, the Bank board chairman, who receives $1,400 per meeting) for attendance at Bank board meetings.
The Corporation's 2000 Stock Incentive Plan provides for the grant of options to eligible directors (i.e., nonemployee directors of the Corporation and/or the Bank) in addition to select key employees. Options are granted at the discretion of the Compensation Committee of the Board of Directors of North Country Financial Corporation. The term of each option is ten (10) years, subject to earlier termination in certain events, and the option price is 100% of fair market value on the date of grant. Options granted to eligible directors under this plan during 2000 were as follows: on April 18, 2000, options were granted to purchase 1,200 shares of common stock at an exercise price of $15.00 per share; and on June 21, 2000, options were granted to purchase 5,000 shares of common stock at an exercise price of $12.00 per share.
EXECUTIVE COMPENSATION
The following table sets forth the compensation received by the Corporation's executive officers whose annual compensation exceeded $100,000, for any of the three years ended December 31, 2000:
| Long-TermCompensation | |||||
Name and | Other | Options | All Other | |||
Principal Position | Year | Salary(1) | Bonus(1) | Annual (2) | Granted (#) | Compensation(3) |
Ronald Ford | 2000 | $250,000 | $0 | $18,000 | 30,000 | $ 8,500 |
Chairman and CEO | 1999 | $230,000 | $69,000 | $15,300 | 40,000 | $10,000 |
1998 | $230,000 | $69,000 | $12,600 | 60,000 | $ 8,000 | |
Sherry Littlejohn | 2000 | $250,000 | $0 | $11,700 | 20,000 | $ 8,500 |
President and COO | 1999 | $150,000 | $45,000 | $10,700 | 40,000 | $ 9,500 |
1998 | $150,000 | $45,000 | $4,500 | 45,000 | $ 7,538 | |
Employment and Consulting Agreements
Mr. Ford's Employment Agreement, dated July 3, 2000, is for a term of five years with an automatic daily extension unless thirty days' notice is given to discontinue the daily extensions. The Agreement provides that Mr. Ford shall serve as Chairman and Chief Executive Officer of the Corporation and the Bank.
Mr. Ford's minimum annual salary under the Agreement is $250,000 and he is entitled to participate in the Corporation's bonus plan and long-term incentive plans, including the Corporation's 2000 Stock Incentive Plan, in accordance with the Board's recommendation. He is also entitled to participate in the Corporation's Supplemental Executive Retirement Plan in accordance with its terms. Mr. Ford is entitled to participate in all other employee benefit and welfare plans available to the Corporation's senior executives, receives the use of a car with a retail value of up to $50,000 and gets four weeks of paid vacation.
If Mr. Ford terminates his employment for Good Reason (as defined in the Agreement) or the Corporation terminates his employment without Cause (as defined in the Agreement), and if he executes the required release, he shall receive twenty (20) quarterly payments, each in an amount equal to twenty-five percent (25%) of his then annual base salary. If Mr. Ford's employment is terminated by the Corporation for Cause, voluntary termination by him or by reason of death or disability, he or his legal representative will receive his annual base salary and related benefits through the date of termination of his employment plus, in the case of his death or disability, a prorated bonus and any other benefits he is entitled to under the Corporation's plans because of his death or disability. If any payment to Mr. Ford is subject to the golden parachute excise tax under Section 4999 of the Internal Revenue Code, Mr. Ford will receive additional payments so that the amount he receives equals the amount he would receive under the Agreement if an excise tax were not imposed.
Mr. Ford also has a Consulting Agreement with the Corporation dated September 15, 1999. Pursuant to the consulting agreement, for up to ten (10) years following his termination of employment other than for death or disability, Mr. Ford will provide such consulting services as may be reasonably requested by the Corporation. The Corporation will pay Mr. Ford $7,000 per month for these services and will continue to provide medical and dental benefits to him and his spouse and dependents in accordance with the most favorable practices of the Corporation as in effect from time to time that are applicable to full-time executives. If he becomes employed by another employer which provides such benefits, benefits under the Corporation's plan become secondary. Mr. Ford will also have the right to purchase for book value the automobile then being provided to him by the Corporation. Mr. Ford has agreed, for the 10-year term of the agreement and the two years thereafter, not to compete with the Corporation, solicit employees of the Corporation to work elsewhere or solicit customers of the Corporation. Mr. Ford has also agreed not to disclose confidential information of the Corporation. The agreement terminates upon the death or disability of Mr. Ford, provided the health and medical benefits continue for the entire 10 year period for the benefit of his spouse and dependents. The Corporation may terminate the Consulting Agreement for Cause (as defined), and Mr. Ford may terminate the agreement at his option. Mr. Ford's right to compensation under the Consulting Agreement will then end, but the restrictive covenants will remain in effect following any such termination of the Consulting Agreement.
Ms. Littlejohn's Employment Agreement, dated September 30, 2000, is for a term of three years with an automatic daily extension unless thirty days' notice is given to discontinue the daily extensions. The Agreement provides that Ms. Littlejohn shall serve as President and Chief Operating Officer of the Corporation and the Bank.
Ms. Littlejohn's minimum annual salary under the Agreement is $250,000 and she is entitled to participate in the Corporation's bonus plan and long-term incentive plans, including the Corporation's 2000 Stock Incentive Plan, in accordance with the Board's recommendation. She is also entitled to participate in the Corporation's Supplemental Executive Retirement Plan in accordance with its terms. Ms. Littlejohn is entitled to participate in all other employee benefit and welfare plans available to the Corporation's senior executives, receives the use of a car with a retail value of up to $50,000 and gets four weeks of paid vacation. If Ms. Littlejohn terminates her employment for Good Reason (as defined in the Agreement) or the Corporation terminates her employment without Cause (as defined in the Agreement), and if she executes the required release, she shall receive twelve (12) quarterly payments, each in an amount equal to twenty-five percent (25%) of her then annual base salary, and for three (3) years following the termination date, will receive medical and dental benefits under the Corporation's plans for active employees at the Corporation's expense. If she becomes employed by another employer which provides such benefits, benefits under the Corporation's medical and dental plans become secondary. If, after a Change in Control (as defined in the Corporation's 2000 Stock Incentive Plan), Ms. Littlejohn terminates her employment for Good Reason or the Corporation terminates her employment without Cause, she shall receive the following benefits in addition to those noted above: outplacement services up to a maximum amount of 15% of her annual base salary plus travel expense reimbursement for job search travel of up to $5,000; the same counseling services that may be available to employees of the Corporation pursuant to the "Employee Assistance Program;" and a cash payment at the end of each of the three (3) years equal to the amounts that the Corporation would have contributed to its qualified retirement plan and Supplemental Executive Retirement Plan on her behalf had she continued her employment and a bonus equal to the bonus earned for the year immediately prior to the year in which the Change in Control occurs. If Ms. Littlejohn's employment is terminated by the Corporation for Cause or voluntary termination by her, or by reason of death or disability, she or her legal representative will receive her annual base salary and related benefits through the date of termination of her employment plus, in the case of her death or disability, a prorated bonus and any other benefits she is entitled to under the Corporation's plans because of her death or disability. If any payment to Ms. Littlejohn is subject to the golden parachute excise tax under Section 4999 of the Internal Revenue Code, Ms. Littlejohn will receive additional payments so that the amount she receives equals the amount she would receive under the Agreement if an excise tax were not imposed.
In the Agreement, Ms. Littlejohn also agrees not to compete with the Corporation, solicit employees of the Corporation to work elsewhere or solicit customers of the Corporation for the three (3) years following her termination of employment. Ms. Littlejohn also agrees not to disclose confidential information of the Corporation.
Option Grants In Last Fiscal Year
The Corporation's 2000 Stock Incentive Plan provides for the grant of options to select key employees of the Corporation as well as eligible directors. Options are granted at the discretion of the Compensation Committee of the Board of Directors of North Country Financial Corporation. The term of each option is ten (10) years, subject to earlier termination in certain events, and the option price is 100% of fair market value on the date of grant.
The following table provides information on options granted in 2000 to the executives listed in the Executive Compensation Table and the potential realizable value of the options.
| % of total |
|
| Potential Realizable | |
Ronald Ford | 30,000 | 25% | $12.00 | 06/21/10 | $226,402 $573,747 |
Sherry Littlejohn | 20,000 | 17% | $12.00 | 06/21/10 | $150,935 $382,498 |
(1) These options are fully vested one year after the date of grant.
(2) Amounts reflect certain assumed rates of appreciation set forth in the SEC's executive
compensation disclosure rules. Actual gains, if any, on stock option exercise depend on
future performance of the Corporation's common stock, overall stock market conditions
and whether and the extent to which the options actually vest.
Aggregate Stock Option Exercises In 2000 And Year-End Option Values
The following table provides information on the exercise of stock options during 2000 by the executives listed in the Executive Compensation Table and the value of unexercised options at December 31, 2000.
Shares |
ValueRealized | Number of Securities | Value of Unexercised In- | |
Ronald Ford | 0 | $0 | 111,200 / 90,800 | $0 / $0 |
Sherry Littlejohn | 0 | $0 | 73,799 / 65,866 | $0 / $0 |
(1) Values are based on the difference between the last reported sale price of the Corporation's
common stock prior to December 31, 2000 ($6.25), and the exercise prices of the options.
Committee Report on Executive Compensation
Decisions on the compensation of the Corporation's executive officers are made by the board's compensation committee comprised of nonemployee directors. In 2000, this committee consisted of Chairman Wesley Hoffman, Stanley Gerou, Mike Henricksen, and Thomas King. This committee report addresses the Corporation's compensation policies and programs for the year ended December 31, 2000.
Base Salary - Excluding consideration of other relevant factors, which may include individual performance, experience, expertise and tenure, the board intends to maintain the base salaries of the Corporation's executive officers and senior managers within peer group levels.
Annually, the committee recommends a base wage for the Chairman and Chief Executive Officer for consideration by the entire board of directors. The committee's recommendation is based upon compensation levels established by the Corporation's peers and evaluations by consultants. The base salary of the President and Chief Operating Officer is determined in a similar manner by the Corporation's Chairman and Chief Executive Officer and the Bank's board of directors. The base salaries of all other executive officers are established by the Corporation's Chairman and Chief Executive Officer.
Long-Term Incentives - To align the interests of its executive officers and senior managers with the Corporation's shareholders, the board's compensation strategy provides for a 401(k) matching contribution and equity-based compensation under the Corporation's stock compensation plan. Each of the Corporation's compensation plans has been adopted by the board of directors, and the equity-based compensation plans have been approved by the Corporation's shareholders.
Wesley Hoffman, Stanley Gerou, Mike Henricksen, Thomas King
AUDIT COMMITTEE REPORT
The Corporation has established a three-member audit committee within the Board of Directors which currently consists of John Lindroth (chairman), Paul Arsenault, and John Miller.
The Board of Directors has determined that each of the three audit committee members is an "independent director," as such term is defined by Rule 4200(a)(14) of the National Association of Securities Dealers' listing standards. The Board of Directors has adopted a written audit committee charter, which charter is set forth on Appendix A to this Proxy Statement.
The audit committee has reviewed and discussed the Corporation's audited financial statements with management.
The audit committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 (SAS 61), "Communication with Audit Committees," as amended, by the Auditing Standards Board of the American Institute of Certified Public Accountants.
The audit committee has received the written disclosures and the letter from the independent accountants required by Independence Standards Board No. 1, "Independence Discussions with Audit Committees," as amended, and has discussed with the independent accountant the independent accountant's independence.
Based on the review and discussions referred to above, the audit committee has recommended to the Board of Directors that the audited financial statements be included in the Corporation's Annual Report on Form 10-K for 2000.
The following table summarizes fees for professional services rendered by the principal accountant for the year ended December 31, 2000:
Audit fees | $70,000 |
Financial information system design and implementation fees | -0- |
All other fees | 136,000 |
Total fees | $206,000 |
======= |
The audit committee has considered that the provision of the services provided for under "financial information systems design and implementation fees" and "all other fees" is compatible with maintaining the principal accountant's independence.
John Lindroth, Paul Arsenault, John Miller
INDEBTEDNESS OF AND TRANSACTIONS WITH MANAGEMENT
Certain of the directors and officers of the Corporation have had and are expected to have in the future, transactions with the subsidiary bank of the Corporation, or have been directors or officers of corporations, or members of partnerships, which have had and are expected to have in the future, transactions with the subsidiary bank. In the opinion of management, all such transactions with officers and directors and with such corporations and partnerships are made in the ordinary course of business and substantially on the same terms, including interest rates and collateral, as those prevailing at the same time for comparable transactions with other customers, and these transactions do not involve more than normal risk of collectibility or present other unfavorable features.
Mr. Hoffman is the sole shareholder of Wesley W. Hoffman & Associates, S.C., which provides legal services to the Corporation and provides loan documentation-related services to the Bank. In 2000, Mr. Hoffman's firm received $32,000 for legal services to the Corporation and $30,000 for loan documentation services.
The Corporation leases a branch office and ATM machine from Mr. Dufina, a director who resigned during 2000. The lease agreement is for a three year period ending February 28, 2003. The lease payments in 2000 were $20,000.
Mr. Arsenault is the owner of a consulting firm that provides financial consulting services to small business entities. In 2000, Mr. Arsenault's firm earned $13,000 in consulting fees relating to loans originated by the Corporation. Mr. Arsenault's fees were paid directly by the loan customers.
Mr. Lindroth is the owner of the insurance agency that the Corporation uses for purchasing property, casualty and automobile insurance. In 2000, Mr. Lindroth's agency earned $20,000 in commissions for insurance sold to the Corporation and its subsidiaries.
BENEFICIAL OWNERSHIP OF COMMON STOCK
As of February 1, 2001, no person was known by management to be the beneficial owner of more than 5% of the outstanding common stock of the Corporation, except as follows:
Name and Address of | Amount and Nature ofBeneficial Ownership |
|
Ernest D. King | 515,792 | 7.3% |
The information in the following table sets forth the beneficial ownership of the Corporation's common stock by each of the Corporation's directors, each of the executive officers listed in the Executive Compensation Table and by all directors and executive officers of the Corporation as a group. Except as noted, beneficial ownership is direct and the person indicated has sole voting and investment power. Indicated options are exercisablewithin 60 days of February 1, 2001.
Amount and Nature of | Approximate | |
Paul Arsenault | 9,529 (2) | * |
Bernard Bouschor | 261,171 (3) | 3.6% |
Ronald Ford | 126,094 (4) | 1.7% |
Stanley Gerou. | 111,800 (5) | 1.6% |
Michael Henricksen | 148,070 (6) | 2.1% |
Wesley Hoffman | 10,958 (7) | * |
Thomas King (12) | 37,572 (8) | * |
John Lindroth | 63,807 (9) | * |
Sherry Littlejohn | 74,112 (10) | 1.0% |
John Miller | 120,909 (11) | 1.7% |
All directors and executive |
|
|
* Less than 1.0%
(1) Includes options for 2,400 shares for Messrs. Arsenault, Bouschor, Gerou,
Hoffman, King, Lindroth, and Miller, 111,200 shares for Mr. Ford, 7,800 shares for
Mr. Henricksen, 73,799 shares for Ms. Littlejohn and 209,599 shares for all directors
and executive officers as a group.
(2) Includes 6,814 shares held in joint tenancy with family members as to which Mr.
Arsenault may be deemed to have shared voting and dispositive power.
(3) Includes 258,456 shares held by the Sault Ste. Marie Tribe of Chippewa Indians as
to which Mr. Bouschor may be deemed to share voting and dispositive power.
(4) Includes 299 shares held by Mr. Ford's spouse and her children as to which Mr. Ford
disclaims beneficial ownership.
(5) Includes 13,156 shares owned jointly with Mr. Gerou's spouse and 47,828 shares
held by Mr. Gerou's spouse's revocable trust as to which Mr. Gerou may be deemed
to have shared voting and dispositive power. Includes 588 shares held by Mr.
Gerou's spouse and children as to which Mr. Gerou disclaims beneficial ownership.
(6) Includes 132,361 shares held jointly with Mr. Henricksen's spouse and 7,907
shares held jointly with his spouse and children as to which Mr. Henricksen may be
deemed to have shared voting and dispositive power.
(7) Includes 6,519 shares held jointly with Mr. Hoffman's spouse as to which Mr.
Hoffman may be deemed to have shared voting and dispositive power.
(8) Includes 21,363 shares held jointly with Mr. King's spouse and 2,854 held jointly
with Mr. King's children as to which Mr. King may be deemed to have shared voting
and dispositive power. Includes 10,286 shares held by Mr. King's spouse and family
members as to which Mr. King disclaims beneficial ownership.
(9) Includes 51,924 shares held jointly with Mr. Lindroth's spouse or by Mr.
Lindroth's children as to which Mr. Lindroth may be deemed to have shared voting
and dispositive power.
(10) Includes 205 shares held jointly with children as to which Ms. Littlejohn may be
deemed to have shared voting and dispositive power.
(11) Includes 112,991 shares held jointly with Mr. Miller's spouse and 394 shares held
jointly with family members as to which Mr. Miller may be deemed to have shared
voting and dispositive power. Includes 1,669 shares held by Mr. Miller's spouse as
to which Mr. Miller disclaims beneficial ownership.
(12) Mr. King's term as director expires as of the annual meeting of shareholders,
April 17, 2001.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on a review of Forms 3, 4 and 5 furnished to the Corporation pursuant to Section 16 of the Securities Exchange Act of 1934, as amended, except as noted below, all of such forms were filed on a timely basis by reporting persons. Messrs. Henricksen, Lindroth, and Miller each filed one late Form 4 with respect to one transaction.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareholder return on the Corporation's common stock with that of the cumulative total return on the NASDAQ Bank Stocks Index and the NASDAQ Market Index for the five-year period ended December 31, 2000. The following information is based on an investment of $100, on December 31, 1995 in the Corporation's common stock, the NASDAQ Bank Stocks Index, and the NASDAQ Market Index, with dividends reinvested. Prior to April 18, 2000, there had been only limited trading in the Corporation's common stock, there had been no market makers for such shares, and the Corporation's common stock had not traded on any stock exchange or on the NASDAQ market. Accordingly, the returns reflected in the following graph and table for the period prior to April 18, 2000 are based on sale prices of the Corporation's stock of which management is aware. There may have been sales at higher or lower prices of which management is not aware. Effective April 18, 2000, the Corporation's common stock is traded on the NASDAQ Bulletin Board under the symbol "NCUF."
1995 | 1996 | 1997 | 1998 | 1999 | 2000 | |
North Country Financial Corporation | 100 | 131.25 | 243.45 | 345.51 | 303.18 | 97.72 |
NASDAQ Bank Stocks Index | 100 | 132.04 | 221.06 | 219.64 | 211.14 | 241.08 |
NASDAQ Market Index | 100 | 124.27 | 152.00 | 214.39 | 378.12 | 237.66 |
Source: Media General Financial Services, Richmond, Virginia.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The financial statements of the Corporation for the year ended December 31, 2000, have been examined by Wipfli Ullrich Bertelson LLP, independent public accountants. A representative of Wipfli Ullrich Bertelson LLP, is expected to be at the meeting and will have an opportunity to make a statement and will be available to answer appropriate questions. Wipfli Ullrich Bertelson LLP has been appointed by the board of directors as the independent public accountants of the Corporation and its subsidiaries for the year ending December 31, 2001.
SHAREHOLDER PROPOSALS
A shareholder proposal must be received by the Corporation no later than November 12, 2001 to be considered for inclusion in the proxy materials for the 2002 Annual Meeting of Shareholders. A shareholder proposal must be received 30 days prior to the meeting and comply with the other requirements in the Corporation's Bylaws and articles of incorporation in order to be considered at the meeting.
OTHER MATTERS
The board of directors is not aware of any matter to be presented for action at the meeting, other than the matters set forth herein. If any other business should come before the meeting, the proxy will be voted in respect thereof in accordance with the best judgment of the persons authorized therein, and discretionary authority to do so is included in the proxy.
The cost of soliciting proxies will be borne by the Corporation. If requested, the Corporation will reimburse banks, brokerage houses and other custodians, nominees and certain fiduciaries for their reasonable expenses incurred in mailing proxy materials to their principals. In addition to solicitation by mail, officers and other employees of the Corporation and its subsidiaries may solicit proxies by telephone, facsimile or in person, without compensation other than their regular compensation.
The Annual Report of the Corporation for 2000 is included with this proxy statement. Copies of the report will also be available for all shareholders attending the annual meeting.
THE ANNUAL REPORT ON FORM 10-K TO THE SECURITIES AND EXCHANGE COMMISSION WILL BE PROVIDED FREE TO SHAREHOLDERS UPON WRITTEN REQUEST. WRITE KRISTINE HOEFLER, NORTH COUNTRY FINANCIAL CORPORATION, 3530 NORTH COUNTRY DRIVE, TRAVERSE CITY, MICHIGAN 49684.
Shareholders are urged to sign and return the enclosed proxy in the enclosed envelope. A prompt response will be helpful and appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
Ronald G. Ford
Chairman and Chief Executive Officer
March 12, 2001
Appendix A
NORTH COUNTRY FINANCIAL CORPORATION
AUDIT COMMITTEE CHARTER
Function
The audit committee is a committee of the Board of Directors. Its primary function is to assist the board in fulfilling its oversight responsibilities by reviewing the financial information that will be provided to the shareholders and others, the systems of internal controls that management and the board of directors have established, and the audit process.
Composition
The audit committee shall consist of at least three outside directors. Audit Committee members and the committee chairperson shall be designated by the full board of directors annually. The duties and responsibilities of a member of the audit committee are in addition to those duties set out for a member of the board of directors.
Responsibilities
The primary responsibilities of the Audit Committee are to:
1) Provide assistance to the Board of Directors in fulfilling its statutory and fiduciary
responsibilities for examinations of the Corporation and its subsidiaries.
2) Monitor accounting and financial reporting policies.
3) Determine that there are adequate administrative, operating and internal accounting controls
and that the company is operating in accordance with prescribed procedures and codes of
conduct.
4) Serve as an independent and objective party in review of financial information as presented
by management for distribution to shareholders of the Corporation and the public.
Duties and Assignments
In order to fulfill the primary responsibilities indicated above, the audit committee will:
1) Provide an open avenue of communication between the internal auditors, the independent
accountants, and the board of directors.
2) Recommend to the board of directors the appointment and compensation of the independent
accountants for the ensuing year.
3) Recommend to the board of directors the appointment and compensation of the internal
auditors for the ensuing year.
4) Consider the audit scope and plan of the internal auditors and the independent accountants.
5) Determine, through discussions with the independent accountants and the internal auditors,
that no restrictions are being placed by management on the scope of their
examinations.
6) Evaluate the adequacy and effectiveness of accounting policies and procedures through
discussions with the independent accountants and internal auditors.
7) Consider and review the adequacy of internal controls and any related significant findings
and recommendations of the independent accountants and internal auditors together with
management's responses thereto.
8) Review quarterly accounting and financial reporting to the public prior to its release, if
practical.
9) Review legal and regulatory matters that may have a material impact on the financial
statements, compliance policies, and reports received from regulators.
10) Review with the independent accountants at the completion of the annual examination:
i) The annual financial statement and related footnotes.
ii) The independent accountant's audit of the financial statements and their report.
iii) Any significant changes required in the independent accountant's audit plan.
iv) Any serious difficulties or disputes with management encountered during the course
of the audit.
v) Other matters related to the conduct of the audit, which are to be communicated to
the committee under generally accepted auditing standards.
11) Consider and review with the internal auditors:
i) Any difficulties encountered in the course of their audits, including any restriction on
the scope of the work or access to required information.
ii) Any changes required in the planned scope of their audit plan.
12) Inquire about significant risks or exposures and assess the steps management has taken to
minimize such risk to the company.
13) Have the power to conduct or authorize investigations into any matters within the
committee's scope of responsibilities. The committee shall be empowered to retain
independent counsel, accountants, or others to assist it in the conduct of any investigation.
14) Report activities to the board of directors via transmitting minutes summarizing the
activities performed along with recommendations the committee deems appropriate.
Frequency and Timing of Meetings
The committee shall meet at least four times per year. The meeting to discuss and review the results of the independent audit for the year-end financial statements will be held prior to the annual shareholders meeting.
REVOCABLE PROXY
NORTH COUNTRY FINANCIAL CORPORATION
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
The undersigned hereby appoints Ronald G. Ford and Sherry Littlejohn, or either of them, with power of substitution in each, proxies to vote, as designated hereon, all of the undersigned's shares of Common Stock of NORTH COUNTRY FINANCIAL CORPORATION, at the Annual Meeting of Shareholders to be held at the Grand Traverse Resort and Spa, 100 Grand Traverse Village Boulevard, Acme, Michigan 49610, on April 17, 2001, at 6:00 p.m., and any and all adjournments thereof:
Please be sure to sign and date this Proxy in the box below.
Date [ ]
___________________________________________________________
Stockholder sign above Co-holder (if any) sign above
1. Election of Directors
(except as marked to the contrary below):
For Withhold For All Except
[ ] [ ] [ ]
Stanley Gerou II John Lindroth
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For All Except" and write that nominee's name in the space provided below.
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT THEREOF.
The Board of Directors recommends a vote "FOR" the nominees listed above.
Properly executed proxies will be voted as marked and, if not marked, will be voted "FOR" all of the nominees.
YOUR VOTE IS IMPORTANT.
Whether or not you plan to attend, you can be sure your shares are represented at the meeting by promptly returning your completed proxy in the enclosed postage-paid envelope which is addressed to our tabulation service at:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016-3572
Detach above card, sign, date and mail in postage paid envelope provided.
NORTH COUNTRY FINANCIAL CORPORATION
3530 North Country Drive
Traverse City, Michigan 49684
Please date, sign exactly as your name appears hereon, and mail promptly in the enclosed envelope which requires no postage if mailed in the United States. When signing as attorney, executor, administrator, trustee, guardian, etc., give full title as such. If shares are hold jointly both owners must sign.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
